House Passes UTC Deal For $400 Million In Tax Breaks

HARTFORD — A deal to give United Technologies Corp. up to $400 million in state tax breaks over five years cruised through the House Thursday despite questions about a taxpayer giveaway benefiting only Connecticut's largest private employer.

The bill will require UTC to make investments in its Connecticut facilities of $500 million by 2020. But the company still could receive up to 90 percent of those tax credits even if its state workforce is cut during that period.

There was a wave of bipartisan support in favor of the deal, which was negotiated by Gov. Dannel P. Malloy's administration. Connecticut's largest business groups and labor also were pushing for the UTC tax breaks. House lawmakers voted 134-4 to send the legislation to the Senate for final action.

The bill was tailored so that only UTC would be eligible for reimbursements of state sales and corporate taxes it pays over the next five years.

Rep. Patricia Widlitz, D-Guilford, called the bill "one of the most significant actions" the General Assembly would take in 2014. She said the agreement would guarantee that UTC stays in Connecticut for at least 15 years and keeps its Sikorsky subsidiary here for a minimum of five years, and require it to invest in a new 425,000-square-foot headquarters and engineering facility in East Hartford.

Connecticut's sluggish job market was clearly on the minds of many House legislators. Rep. Prasad Srinivasan, R-Glastonbury, called the deal "very important, very crucial to all of us" because of the "ripple effect" of keeping UTC and its more than 15,000 employees in this state.

"These are a lot of good, high-paying jobs," said Rep. Thomas Vicino, D-Clinton.

House Republican Leader Lawrence Cafero Jr. of Norwalk said he fervently hopes all of UTC's plans to maintain and even expand its workforce in Connecticut come true. "I'm just scared," Cafero said. "What if it doesn't happen?" Cafero ended up voting for the deal.

One of the few naysayers was Rep. Robert Sampson, R-Wolcott.

"I believe this type of policy is a symptom … of a poorly run state economy," Sampson said. He argued the legislation "only reduces taxes for one company, and I think that's completely unfair."

"We're the ones footing the bill so someone else can have a tax break," Sampson said. "I believe it's the exact opposite of what we should be doing."

Other lawmakers admitted they were worried about the "pay-to-stay" aspects of the deal, even if they were voting in favor of the bill.

"I would hate to see this deal become a political centerpiece," said Rep. Gail Lavielle, R-Wilton.

Rep. Bill Aman, R-South Windsor, said the idea of singling out one company for such big tax breaks "is a problem for me." But he also called the deal a "win, win" proposition for the state and the company that could encourage UTC and its subsidiaries like Pratt & Whitney to sell and buy more in Connecticut.

Widlitz, who is co-chair of the legislature's finance committee, acknowledged that UTC still would be eligible for tax credits even it cut some Connecticut jobs in the future.

She said the agreement between the state and the company would set base employment levels in various job categories. "Should [UTC] go below it, they'll be eligible for fewer tax credits," Widlitz said, noting that adding jobs above the agreed-upon level would result in larger tax breaks.

Cafero said UTC actually could cut more than 1,600 jobs in Connecticut and still be eligible to receive 35 percent of the tax breaks.

The deal will limit tax reimbursements to UTC to a maximum of $400 million over five year.